Valuation – How it works

Valuation – How it works

How valuation works:

We use a variety of techniques in deriving accurate valuations, utilising existing market data, experience, skills and judgment. Accurate valuations can be used for buy-outs, exits, fund-raising, negotiations, tax planning, arbitration and disputes. Methods include:

DCF valuation (discounted cash flow):

A method used to estimate the attractiveness of an investment opportunity. DCF analysis uses future free cash flow projections and discounts them (most often using the weighted average cost of capital) to arrive at a present value, which is used to evaluate the potential for investment.

Asset valuation:

Basically, these business valuation methods total up all the investments in the business. Asset-based business valuations can be done on a going concern or on a liquidation basis as follows:

  • A going concern asset-based approach lists the business net balance sheet value of its assets and subtracts the value of its liabilities
  • A liquidation asset-based approach determines the net cash that would be received if all assets were sold and liabilities paid off

 

Market Valuation:

This valuation reflects the price that the market at a point in time is prepared to pay for the shares and the one most applicable to our clients. This base valuation method broadly takes into account the investors’ perceptions about the performance of the company and the management’s capabilities to deliver a return on their investments.

We have access to up-to-date valuation data across 134,000 companies  (47,000 listed businesses and  87,000 M and A transactions) worldwide, in Switzerland and across a whole range of sectors to help us arrive at and benchmark your business valuation:

A. Based on using a number of metrics including

  • Sales
  • EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation)
  • EBIT (Earnings Before Interest and Tax)
  • Net Income
  • Equity
  • Net Financial Debt
  • Liquidity

and…

B. Of other companies in your sector /geographical area, based on data for the

  • Current month
  • Previous month
  • Last three months average
  • Last twelve months average

we can produce a value for your business with mean, medium with upper and lower ranges based on:

  • Sales (Gross sales earned from customers before costs)
  • EBITDA (Earnings before Interest, Tax, Depreciation and Amortisation)
  • EBIT (Earnings Before Interest and Tax)
  • P/E (Share price / Earnings ratio)
  • PB (Market price to Book or value of the net assets in the books of account)
  • All (combination of all of the above metrics)
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